Trump Visits China, Sino-U.S. Trade Reaches Key Turning Point! Fed Rate Hike Expectations Weigh on International Oil Prices

1. Overnight Crude Oil Market Updates

Market attention to the possibility of a Federal Reserve interest rate hike, combined with weak economic and demand expectations, led to a decline in international oil prices. NYMEXCrude oil futuresThe 06 contract fell by USD 1.16/bbl to USD 101.02/bbl, down 1.14% from the previous session; ICE Brent futures 07 contract fell by USD 2.14/bbl to USD 105.63/bbl, down 1.99% from the previous session. China’s INE crude oil futures 2606 contract rose by RMB 9.0/bbl to RMB 644.1/bbl, and fell by RMB 21.9/bbl to RMB 622.2/bbl in night trading.

Future market outlook

Oil prices maintain a high volatility trend and are subject to fluctuations influenced by geopolitical expectations, which may lead to adjustment at any time. However, overall supply and demand support a strong oil price. The navigation issues in the Strait of Hormuz are the most critical factor determining the direction of oil prices. In the second quarter, the gap in crude oil supply is widening, which drives oil prices to remain highly volatile while gradually shifting upward. Attention should be paid to rhythm control and strengthening risk management.

II. Macroeconomic Developments

The world's top three companies by market capitalization—Nvidia, Apple, and Google—all hit record highs.

2. Anthropic is reportedly valued at over $900 billion, surpassing OpenAI for the first time.

Fed’s Collins: If inflation does not ease, rate hikes may be needed.

4. The U.S. PPI surged 1.4% month-on-month in April and jumped 6% year-on-year, both marking the largest increases since 2022.

5. OPEC has lowered its forecast for global oil demand growth in 2026 from 1.38 million barrels per day to 1.17 million barrels per day.

Vance: Negotiations with Iran are making progress and are currently focused on diplomatic channels; the president and the entire team care about the financial well-being of the American people.

7. U.S. President Trump arrived in Beijing to begin his visit to China.

8. He Lifeng held economic and trade consultations with U.S. Treasury Secretary Bessent in South Korea.

9. State Administration for Market Regulation: Launch a special campaign to remove bottlenecks and obstacles that hinder the unified market and fair competition.

III. Plastics Futures Market Dynamics

Oil prices surged then retreated! Domestic plastic futures main contracts were mixed.

The Plastic 2609 contract was quoted at 8,186 yuan/ton, down 0.33% from the previous trading day.

PP2609 contract was quoted at 8,823 yuan/ton, up 0.48% from the previous trading day.

The PVC2609 contract was quoted at 5,154 yuan/ton, up 0.59% from the previous trading day.

The styrene 2605 contract was quoted at 9,145 yuan/ton, down 0.71% from the previous trading day.

IV. Market Outlook Forecast

PE: The downstream manufacturing sector’s earlier round of concentrated replenishment has basically come to an end. Faced with continuously rising raw material prices, enterprises are showing low acceptance and obvious resistance, which has directly led to a gradual cooling in spot transactions and a continuous decline in trading activity. On the other hand, from the external geopolitical and cost perspectives, there is a significant gap between the core demands of the US and Iran, and the negotiation process has struggled to reach a consensus, leaving the situation deadlocked. This has heightened market concerns over the stability of crude oil supply and pushed international oil prices steadily higher. Cost support has consequently continued to strengthen. In addition, the overall macro environment is relatively optimistic, and market participants are generally in a bullish mood with positive expectations for the trend. Overall, strong cost-side support and weak end-user demand are clearly offsetting each other. In the short term, the polyethylene market is unlikely to break into a one-sided uptrend or downtrend, and is more likely to remain range-bound, with limited upside and downside, while overall trading sentiment is expected to stay subdued and slightly weak.

PP: Demand on the consumer side is relatively sluggish, with profit margins in downstream industries continuously compressed. The order volume for end products is gradually declining, and the enthusiasm for purchasing is weak. High-priced raw materials are struggling to drive large-scale actual transactions. Currently, the overall supply of spot market goods is tight, and cost support remains solid. Most traders are cautious in maintaining prices, with quotes staying firm. Considering all factors, the positive impact of costs and weak demand are offsetting each other, and the polypropylene market is likely to maintain a range-bound fluctuation in the short term, with limited space for price increases or decreases. The overall transaction pace will also remain subdued.

PVC: In terms of news, on May 13, the Ministry of Industry and Information Technology issued a notice regarding the organization of energy conservation inspections for the year 2026. The inspections will cover enterprises in industries such as steel, synthetic ammonia, refining, ethylene, caustic soda, soda ash, methanol, polyvinyl chloride, electrolytic aluminum, industrial silicon, cement, flat glass, construction and sanitary ceramics, and computing facilities. The goal is to achieve full coverage of energy conservation inspections for the aforementioned industries in the region by 2026-2027 (with full coverage for calcium carbide-based PVC production enterprises by 2026). This news led to a noticeable increase in the market during the closing hours, also improving the sentiment in the spot market, with spot prices poised to rise. Overall, the PVC spot market may operate slightly stronger in the short term.